AOL Makes Play for Hispanic/Latino Market

AOL Time Warner’s America Online unit and Hispanic/Latino media giant Univision Communications are seeking to jointly capitalize on the nation’s fast-growing Spanish-speaking population with a series of new cross-marketing initiatives.

Financial terms of the deal between the two media players were not disclosed, though Los Angeles-based Univision.com will license America Online’s email application, as well as AOL’s Instant Messenger, through the arrangement.

In return, America Online expects to make significant inroads into the Hispanic/Latino community. The Dulles, Va.-based unit will expand its Spanish-language offerings with content from Univision.com appearing across its service and its Web properties, which include Netscape.com and Compuserve.

Currently, the U.S. AOL service offers Spanish-language content via AOL Keyword: Latino, which is overseen by AOL Latin America. That section now will include news and other content from Univision.

At the same time, Univision’s television networks will promote America Online via a series of Spanish-language spots.

The campaign will run on the Univision Network, which the company said reaches 95 percent of the U.S.’s Hispanic/Latino households; cable network Galavision; and Telefutura, a new network slated to launch next month. Univision also said it would include AOL Keywords in its television advertising for Univision.com.

It’s well-known in marketing circles that by targeting advertising creative and media buys to ethnic groups the message’s efficacy is generally increased — a fact that could make the alliance with Univision profitable for New York-based AOL Time Warner.

As traditional and online ad spending has dwindled, the conglomerate has found revenue from subscriptions to online services and Time Inc. magazine to be one of its most consistent money-makers — comprising almost half of its revenue. And, a large percentage of its new magazine subscriptions come from promotion on America Online. Through the arrangement, then, Time Inc. could be free to promote its Spanish-language magazines to a Spanish-speaking online audience.

Hispanic/Latino consumers, who comprise about 4 percent of the population, represent a huge, untapped market for America Online. According to recent studies by the U.S Census Bureau, only 37 percent of U.S. Hispanic and Latino households are wired. But the Pew Internet & American Life Project reports that online Hispanics and Latinos are more likely than any other ethnic group to have browsed the Web for fun, listened to music online, downloaded music, played online games, looked for information about books and movies and sampled audio and video clips — making AOL’s play for the demographic potentially lucrative.

Javier Saralegui, executive vice president of Univision Communications and president of Univision Online, described the alliance as a “win-win-win.”

“America Online receives content and promotion across Univision’s wide array of television networks — the most effective medium to reach U.S. Hispanics; Univision enjoys broader distribution of its content and the ability to offer Univision.com users AOL’s popular applications; while users get the best each company has to offer,” he said. “We see [it] as the marriage of the best in U.S. Hispanic content and the world’s leading interactive services company.”

Added America Online chairman and chief executive Barry Schuler, “this alliance … is driven by the immense popularity of U.S. Hispanic-oriented news and entertainment, and the importance of reaching Hispanics in the U.S. through a brand they know, trust and love — Univision.”

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